“Honesty is the best policy – when there is money in it.” – Mark Twain
Would you be surprised to learn that Fannie Mae employees are selling REOs listings to brokers for kickbacks? Investigators are examining whether soliciting illegal payments is a common practice at Fannie Mae’s Irvine, California office.
Shouldn’t the office of Fannie Mae foreclosure “specialists” be deciding which brokers receive which listings based on the broker’s knowledge of the particular market and types of clients they service, not based on who’s willing to get their hands dirty for a shot at a bigger paycheck? It’s frustrating to see some brokers play by the rules and still get the short end of the stick.
Armando Granillo, a foreclosure specialist at mortgage giant Fannie Mae was taken into custody after a sting operation exposed him for attempting to receive a kickback of $11,200 in solicitation for foreclosure listings to brokers.
Granillo was one of 50 employees in Fannie Mae’s Irvine office responsible for moving thousands of homes in Western states off Fannie’s books through foreclosure sales. He and his office were given the power to decide who can market homes most effectively, what to spend on rehab and maintenance, how to deal with liens of properties, and whether to accept bids from potential buyers presented by brokers.
In the exchange with one particular broker, investigators allege Granillo demanded 20% of the broker’s commissions in exchange for the listings. He promised the broker they’d “put other realtors in Tucson out of business.” He has been charged with three counts of fraud charges, to which he has pleaded not guilty, and remains free on bond, pending trial scheduled for August 6th in the U.S. District Court in Santa Ana.
Granillo asserts that such kickbacks were “a natural part of the business,” like getting baseball tickets for closing a deal.
Cecelia Carter, a former foreclosure specialist in Irvine, filed a wrongful termination suit against Fannie Mae who fired her in 2011, contending that it was because of her attempts to expose the kickback scheme. She argues that the company failed to address her grievances about numerous errors and oversights, including marketing homes without clear title and assigning brokers to list homes in markets in which they were unfamiliar.
What are your thoughts on this level of widespread corruption within the foreclosure offices of Fannie Mae? Share your thoughts below. Read full story here.